Loonie gains nearly a cent as energy, metal stocks lift TSX
Linda Nguyen, The Canadian Press
Published Wednesday, March 9, 2016 1:03AM EST
Last Updated Wednesday, March 9, 2016 4:42PM EST
TORONTO -- The loonie soared nearly a full cent and the Toronto stock market headed higher Wednesday, buoyed by rising energy and metal stocks.
The S&P/TSX composite index added 81.85 points or 0.61 per cent to close at 13,392.90.
On Wall Street, the Dow Jones industrial average gained 36.26 points at 17,000.36, while the Nasdaq composite index jumped 25.56 to 4,674.38.
The S&P 500 composite index advanced 10 points to 1,989.26, nearly tripling where it was seven years ago, when it bottomed out on March 9, 2009, at 676.53.
Since then, stocks have been steadily gaining as central banks, including the U.S. Federal Reserve, resorted to measures such as lowering interest rates on bonds and other safer assets to encourage investors to take on more risk. The current bull market is the third-longest of 11 since the Second World War.
Colum McKinley, Canadian equities manager at CIBC Global Asset Management, said sentiment at the time was at its worst but today's markets show that investor confidence has returned.
"I remember those days. It was an incredibly deep, dark time for investors," he said. "There was a lot of commentary out there about the world going into a global depression. Fear was at its highest."
McKinley said the low point had shown investors that central banks were willing to do "everything and anything" they need to do to help the global economy -- a notion he said still holds true.
Stocks and other risky assets have benefited in the meantime, and present day market volatility is still an incredible buying opportunity, just as it was in 2009, he added.
"Investors who can take a long-term perspective and kind of look through the volatility, so to speak -- they tend to be the best and do the best," he said.
"Investors who emotionally react to the fear that they're seeing in the headlines on a daily basis, that those types of decisions can be quite punitive over the long term."
The Canadian dollar gained nearly a cent in value, up 0.93 of a U.S. cent at 75.47 cents US. The advance followed the Bank of Canada's announcement that it is holding its key interest rate at 0.5 per cent.
The dollar's climb was also supported by the April crude contract, which gained $1.79 at US$38.29 per barrel, as investors continued to await a decision later this month by OPEC countries whether to limit production.
April natural gas was up four cents at US$1.75 per mmBtu, while May copper contracts rose a penny to US$2.23 a pound. The April gold contract lost $5.50 to US$1,257.40 an ounce.